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The target of sanctions in the Trade War Crossfire

According to Prime Minister Mahathir Mohamad, Malaysia may become a target of sanctions, as the export-reliant economy is caught in the crossfire of the U.S.-China trade war.

Trade tensions between the world’s two biggest economies could evolve into another Cold war, although he didn’t specify who could impose the curbs, Mahathir said.

“Economically we are linked to both markets, and physically we are also caught in between for geographical reasons,” Mahathir said in Kuala Lumpur.

“There are even suggestions that we ourselves would be a target for sanctions.”

Malaysia will prepare for the worst by cooperating with regional neighbors, but didn’t elaborate, he said.

President Donald Trump describing the Southeast Asian nation as “almost the single worst abuser of everybody” when asked if he wanted to impose tariffs on the nation, neighboring Vietnam has already drawn the U.S. government’s ire.

In the U.S. Treasure watch list, Malaysia was placed for currency manipulation in May for its bilateral trade and current-account surplus. However, this was denied by the central bank and said that it supports free and fair trade.

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